ONGC targets eastern offshore fields to produce by 2018

State-run explorer Oil and Natural Gas Corp (ONGC) is poised to finalise the field development plan of its Krishna Godavari basin KG-D5 fields and the target for starting production is mid-2018, chairman D.K.Sarraf said Friday.

"Out of the other major planned projects, management is especially focused on the development of Daman and KG-DWN-98/2," Sarraf said while addressing shareholders at the company's 21st annual general meeting here.

KG-DWN-98/2 block, also known as the KG-D5 fields in the eastern offshore, that are taking longer than expected to come on stream, are contiguous to those owned by a Reliance-led consortium, while the state explorer has alleged that a shift in reservoir could have resulted in Reliance drawing gas from its find. Both parties have appointed a third-party international assessor, DeGolyer and MacNaughton (D&M), to assess ONGC's claim.

The Daman development project in the Tapti-Daman block on the western offshore are smaller, less difficult fields to exploit than the larger KG-D5.

The Daman project has gas reserves of about 35-36 billion cubic metres (bcm), of which 60-70 percent of natural gas is recoverable.

Looking ahead, two more areas of significant discoveries adjacent to Daman - GK-28/42 and MB-OSN/2005/1 - could also be put under production through cluster development in the near future, which would make the northern area of Bassein one of the largest gas producing area in the country, ONGC has said.

In his address to shareholders, the chairman said the management was committed towards expeditious development of the company's oil and gas reserves. Sarraf said, out of 15 prospective projects taken up for development, seven projects are already complete and 8 are under various stages of implementation.

In the 2013-14 fiscal, ONGC remained the largest producer of crude oil and natural gas in the country . Production from its domestic fields was maintained at 45.53 million tonne of oil equivalent (mmtoe) against 46.11 mmtoe in the previous fiscal.

The total Oil plus Oil-equivalent Gas (O+OEG) production of ONGC Group in fiscal 2014 (including ONGC Videsh and ONGC's share in Production Sharing Contracts) has been 59.2 mmtoe against 58.73 in fiscal 2013.

Sarraf said ONGC's m'jor producing fields are ageing and showing natural decline, but with Improved Oil Recovery (IOR) and Enhanced Oil Recovery (EOR) schemes applied in these fields till fiscal 2014, a cumulative incremental gain of 87.41 million tonne had been achieved.

In 2013-14, ONGC registered its highest-ever revenue at Rs.842.01 billion, a growth of 1.1 percent from Rs.832.90 billion in the previous fiscal.

The company also posted a higher profit after tax of Rs.220.95 billion, up 5.6 percent from fiscal 2013, after sharing the highest ever under-recovery, or losses on selling below cost, of Rs.563.84 billion.

At 2.19 pm Friday, ONGC stock was trading at Rs.415.00 a share, 0.65 points, or 0.16 percent, higher than its previous close on the Bombay Stock Exchange (BSE).